Page No.# 1/ vs The State Of Assam And 3 Ors
2025 Latest Caselaw 6328 Gua

Gauhati High Court

Page No.# 1/ vs The State Of Assam And 3 Ors on 26 August, 2025

                                                                 Page No.# 1/11

GAHC010013872017




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                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                        Case No. : WP(C)/1101/2017

         MARICO LTD. and ANR.
         A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND
         HAVING ITS REGISTERED OFFICE AT GRADE PALLIDIUM, 7TH FLOOR, 175
         CST ROAD, KALINA, SANTACRUZ E, MUMBAI- 400098 AND ITS BRANCH
         OFFICE AT BHAGAVATI ENTERPRISE, OPP. RELIANCE TELECOM
         GODOWN, MOUZA, GUWAHATI- 781034 AND ITS MANUFACTURING UNIT
         AT PLOT NO 1-G, BRAHMAPUTRA INDUSTRIAL PARK, VILL. SILA, POST-
         CHANGSAN, DIST. KAMRUP, GUWAHATI- 781101.

         2: MR. ARINDOM PAUL

         AUTHORISED REPRESENTIVE OF PETITIONER NO. 1 ABOVE NAMED
         HAVING OFFICE AT C/O. BHAGAVATI ENTERPRISE
         OPP. RELIANCE TELECOM GODOWN
         MOUZA
         GUWAHATI- 781034

         VERSUS

         THE STATE OF ASSAM and 3 ORS.
         REP. BY THE PRINCIPAL and SECRETARY TO THE GOVT. OF ASSAM, DEPTT.
         OF AGRICULTURE, HAVING THEIR OFFICE AT DISPUR, GUWAHATI.

         2:ASSAM STATE AGRICULTURAL MARKETING BOARD

         A BOARD CONSTITUTED UNDER THE ASSAM AGRICULTURAL PRODUCT
         MARKET ACT
         1972
         REP. BY ITS CHAIRMAN
         RAM KRISHNA MISSION ROAD
         ULUBARI
         GUWAHATI- 781007
         ASSAM.
                                                                            Page No.# 2/11

            3:GUWAHATI STATE AGRICULTURAL MARKETING COMMITTEE

             HAVING ITS OFFICE AT RAM KRISHNA MISSION ROAD
             GUWAHATI
             ASSAM.

            4:CHIEF EXECUTING OFFICER

             ASSAM STATE AGRICULTURAL MARKETING BOARD
             HAVING ITS OFFICE AT RAM KRISHNA MISSION ROAD
             ULUBARI
             GUWAHATI- 781007
             ASSAM

Advocate for the Petitioner   : MS.N HAWELIA, MR.M L GOPE,MS.N BORDOLOI,MS.N
GOGOI

Advocate for the Respondent : MR. N J GOGOI, MR.S SAIKIA(SC, A.S.A.M.B.)




                                    BEFORE
                        HONOURABLE MR. JUSTICE KARDAK ETE

                                       JUDGMENT

Date : 26-08-2025

Heard Ms. N. Hawelia, learned counsel for the petitioners. Also heard Mr. N.J. Gogoi, learned Standing Counsel, ASAMB appearing for all the respondents.

2. By filing this petition, the petitioners have prayed for a declaration of the levy and collection of Cess by the respondents on 'coconut oil' and 'refined coconut oil' illegal and also for a direction to the respondent authority to refund the Cess amount of Rs.3,61,97,075/- with interest @ 18% per-annum, to the petitioners wrongfully and illegally collected by the respondents.

3. The petitioner No. 1 is a company incorporated under the provision of

Companies Act, 1956 having its registered Office at Grade Pallidium, 7 th Floor, Page No.# 3/11

175 CST Road, Kalina Santacruze (E), Mumbai and is engaged in the business of manufacturing, marketing and distribution of consumer products under various popular brands such as, Parachute, Saffola, Parachute Advanced, Set Wet, Hair & Care, Nihar, Mediker, Revive, etc.

4. The petitioner has 8 (eight) manufacturing units and various branch offices/warehouses located all over the country, where, inter alia, manufactured coconut oil and sells the same under the brand name 'Parachute'. In order to ensure regular and timely supply of its products to its distributers/suppliers located all over the country, the petitioner has set up sales depot/warehouses at various locations in India.

5. The petitioner challenges the action of the respondents in levying and collecting of Cess on coconut oil and sold under the brand name 'Parachute' brought in the State of Assam by the petitioner by way of branch transfer from its manufacturing units, located at Pondicherry, Kerala and Tamil Nadu and also the collection of Cess on 'refined coconut oil' manufactured/purchased by the petitioner outside the State of Assam and brought into the State of Assam for use as raw material in manufacturing of finished goods viz. hair care products, manufactured at its unit located in the State of Assam.

6. It is the contention of the petitioner that Cess is illegally and wrongfully levied and collected by the respondents at the time of the entry of the goods into the State of Assam by stopping the vehicles carrying the said goods at the check posts located in the border of the State and by preventing the entry of the vehicles into the State of Assam unless Cess is paid on the goods even though no Cess is liable to be paid under the Assam Agricultural Market Produce Act, 1972 (in short, Act of 1972) in respect of the 'coconut oil' or 'refined coconut oil'.

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7. It is contended that on a plain reading of Section 21 of the Act of 1972 in the context of meaning attributed to the key words as per their definition in the Act of 1972 shows that the Market Committee has the power to levy and collect Cess only on the agricultural purchase/specified agricultural produce which is set out in the Schedule to the Act of 1972 and that too when the said agricultural produce is bought or sold in the market area and not otherwise. Furthermore, as the words 'bought and 'sold' are not defined, the dictionary meaning is required to be attributed to the said words. Accordingly, 'bought', would mean 'obtain in exchange of payment' and 'sold', would mean 'give or hand over something in exchange for money'. Thus, it is essential that there is a transfer of title in the goods viz, agricultural produce in exchange for money, failing which no Cess can be levied and collected by the respondent.

8. The petitioner had set up depot/warehouse at Guwahati for the State of Assam to cater to the requirements of the distributors/suppliers/retailers located in the State of Assam and other North Eastern States for sales within the aforesaid regions. The sales depot/warehouse would receive the finished goods viz, coconut oil, manufactured by the petitioner at its units located at Pondicherry, Kerala and Tamil Nadu as the finished goods are transported by road, the respondent authority forcefully and illegally collected the Cess on the ground that the goods sought to be brought into the State of Assam by the petitioner as an agricultural produce and as per the provisions of the Act of 1972 and the Rules made there under, the petitioner is required to pay Cess @ 1% of the value of the goods sought to be brought into the State of Assam, failing which, the vehicle carrying the said goods would not be permitted to enter into the State of Assam.

9. It is contended that in the case of transportation of the finished goods and Page No.# 5/11

even raw materials, i.e. refined coconut oil is transported by road and even its vehicles carrying the said finished goods have been stopped from entry into the State unless the Cess @ of 1% of the value of the goods sought to be brought into the State of Assam is paid. The petitioner has been compelled to pay Cess on 'coconut oil' and 'refined coconut oil'.

10. It is contended that the wrongful and illegal levy and collection of Cess by the respondents on 'coconut oil' and 'refined coconut oil' brought in the State by the petitioner started in the year 2002-03 and 2016-17 respectively and continued till the Act is repealed and despite repeated protests, the petitioner has been compelled to pay Cess on 'coconut oil' and 'refined coconut oil' illegally. A total amount of levy on collected cess is Rs.3,61,97,075/-, which has been wrongfully and illegally collected by the respondents which are required to be refunded as the Schedule to the Act of 1972 clearly reflects that there was/is no entry of the subject items i.e. 'coconut oil' and/or 'refined coconut oil' in the Schedule to the Act of 1972 and it is not specified agricultural produce therefore, no Cess could ever have been levied or collected from the petitioner.

11. Ms. N. Hawalia, learned counsel for the petitioner submits that the Coordinate Bench of this Court vide judgment and order dated 31.07.2018 in WP(C) 4469/2015 (Tinsukia Trading Company Private Limited vs. The State of Assam and Ors,.) has decided similar matter with respect to illegal collection and

levy of Cess on mustard oil wherein relying on the various judgments of the Hon'ble Supreme Court, it has held that as per Schedule to the Act of 1972 it is mustard oil seed, on which Cess is leviable and not mustard oil and therefore, the action by the respondent in levying Cess imported on mustard oil under Section 21(1) of the Act of 1972 read with clause IV(2) of the Schedule, cannot be sustained in law and accordingly declared as such.

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12. It has further been held that the respondents cannot levy Cess on mustard oil imported by the petitioner from outside the State and the Cess levied therefore, shall be refunded back to the petitioner after due verification. Therefore, the learned counsel for the petitioner submits that the above judgment and order squarely covers the case of the present petitioner as the respondents cannot levy Cess on imported 'coconut oil' and 'refined coconut oil' under Section 21(1) of the Act of 1972 read with Clause IV(6) of the said Act and as such, the Cess already levied from the petitioner on 'coconut oil' and 'refined coconut oil' may be directed to be refunded to the petitioner.

13. Mr. N.J. Gogoi, learned Standing Counsel, Assam State Agriculture Marketing Board (ASAMB) submits that the case of Tinsukia Trading Company Private Limited (supra) was taken to an appeal being WA 288/2018 before the

Division Bench. He submits that so far as the levy of Cess to be not sustainable in law as held by the learned Single Judge has not been interfered with by the Division Bench. However, it has been held that the direction to refund the Cess collected would not be justified and while upholding the order of the learned Single Judge on merit, the direction to refund has been set aside and quashed. He submits that even if the Cess levied is held to be wrong, in view of the poor financial health of the Board, it would not be possible for the Board to refund the amount, which has already been collected, as the collection of Cess has already been closed way back in 2017.

14. Alternatively, Mr. Gogoi, learned Standing counsel submits that in view of the rule 25(e) of the Assam Agricultural Produce Markets (General) Rules, 1975, if at all, the petitioner is entitled to any refund, a written application has to be filed before the authority for such refund. Therefore, he submits that the petitioner has alternative remedy which has not been availed.

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15. While rejoining her submission, Ms. N. Hawalia, learned counsel for the petitioner submits that so far as interference by the Division Bench with regard to the refund of the levy of Cess collected in the case of Tinsukia Trading Company Private Limited (supra), the Division Bench has taken note of the fact

that the petitioner has passed the said burden to the end-user and therefore is not entitled to be refunded which is clearly distinguisible from the present case. She submits that in the instant case, the Chartered Accountant and the Suppliers and Distributors have certified that the price recovered from the Distributers is not inclusive of agricultural Cess and the Cess paid by the petitioner is from their own pocket and debited in P&L Account and not from the distributers/customers and the suppliers have not paid agricultural Cess to the petitioner on the purchase of Parachute coconut oil.

16. I have considered the submissions advanced by the learned counsel for the parties and have perused the materials available on record as well as the judgment and order passed in WP(C) 4469/2015 and WA 288/2018.

17. The petitioner imports 'coconut oil' and 'refined coconut oil' from outside State of Assam for sell within the State of Assam and other Northeastern States. The respondents have been levying Cess on the imported 'coconut oil' and 'refined coconut oil' under Section 21(1) of the Act of 1972. It is the contention of the learned counsel for the petitioner that 'coconut oil' and 'refined coconut oil' is not an agricultural produce as specified in the Schedule as appended to the Act of 1972, which was not considered and cess has been levied on the imported 'coconut oil' and 'refined coconut oil' while entering into the check gates. Accordingly, it is the contention of the learned counsel for the petitioner that the levy of Cess on 'coconut oil' and 'refined coconut oil' is illegal as the same is not an agricultural produce as per clause IV of the Schedule to the Act Page No.# 8/11

of 1972. However, the respondents have levied Cess on the 'coconut oil' and 'refined coconut oil' imported by the petitioner from outside the State, which has been assessed at total amount of Rs.3,61,97,075/-, for the period from 2002-03 to 2016-17.

18. The Act of 1972 has been enacted to provide for better regulation of buying and selling of agricultural produce and the establishment of market for agricultural produce in the State of Assam and for matters connected therewith. Preamble to the Act says that the objective behind the enactment of the Act is to provide for better regulation of buying and selling of agricultural produce in the State of Assam and establishment of regulated markets for agricultural produce.

19. As per Section 2 (1) (i) of the Act, "Agricultural Produce" has been defined to mean and include any produce whether processed or non-processed of Agriculture, Horticulture, Animal Husbandry, Pisciculture, Sericulture and Forest as specified under Schedule. Specified agricultural produce has been defined under Section 2 (xxiv) to mean any or all the items included in the Schedule to the Act. As per Section 2 (1) (xxxiii), a Schedule has been defined to mean a Schedule to the Act. Under Section 2 (1) (XLV), processing has been defined to mean anyone or more of a series of treatment relating to powdering, crushing, decorticating, dehusking, parboiling, polishing, ginning, pressing, curing or any other manual, mechanical, chemical or physical treatment to which raw agricultural produce or its product is subjected to.

20. Power to levy cess is traceable under Section 21 of the Act. As per Section 21 (1), every Market Committee shall levy and collect a cess on the agricultural produce brought or sold in the market area at a rate not exceeding two rupees for every one hundred rupees of the aggregate amount for which a specified Page No.# 9/11

agricultural produce is bought or sold whether for cash or for deferred payment or other valuable considerations. In terms of Section 2 (1) (xxxiii), a Schedule is appended to the Act containing the list of specified agricultural produce. Clause- IV of the Schedule lists the specified agricultural produce under the heading "Oil seed". At clause IV (6) of oil seed is mentioned "coconut". In other words, coconut oil seed is a specified agricultural produce on which cess may be levied under Section 21 (1) of the Act.

21. The Schedule to the Act of 1972 is a self-contained list of specified agricultural produce on which cess can be levied. The Legislature has specifically mentioned the specified agricultural produce in the Schedule on which cess is leviable under the Act by the Marketing Board. By way of processing which includes powdering, crushing, decorticating, dehusking, parboiling, polishing etc., a processed product can also be included in the said Schedule as specified agricultural produce for levy of cess. The objective is to adopt a pragmatic approach so that various seeds of specified agricultural produce included in the Schedule are brought within the ambit of the cess net.

22. In the case of Tinsukia Trading Company Private Limited (supra) this Court has held that the levy of Cess on imported mustard oil under Section 21(1) of the Act of 1972 read with Clause IV(2) of the Schedule cannot be sustained and accordingly, the respondents cannot levy Cess on mustard oil imported by the petitioner from outside the State and the Cess levied so far shall be refunded back to the petitioner after due verification. The judgment and order of the Coordinate Bench was taken to an appeal being WA 288/2018. A Division Bench while upholding the order passed by the learned Single Judge on merits, the direction to refund has been interfered with.

23. On consideration of the judgment of the Division Bench, it reflects that it Page No.# 10/11

will be a case of unjust enrichment if the Cess amount, which was collected from end-user is directed to be paid to the appellants as no details of refund has been indicated with specific reference to the manner in which it will be refunded to the end-user. Therefore, the direction of the learned Single Judge to refund the levy of cess collected would not be justified and accordingly, the direction to refund has been set aside.

24. Having considered the above judgment and order, it is inescapable to conclude that the above judgment would cover the case of the petitioner on merits in view of the fact that as per Schedule to the Act of 1972 in Clause IV(6) the entry is made as to the 'coconut oil seed' and not coconut oil or 'refined coconut oil' as that of the mustard oil seed and not 'mustard oil'. Therefore, the levy of collection of Cess on the 'coconut oil' and 'refined coconut oil' cannot be sustained. Thus, the levy of Cess on 'coconut oil' and 'refined coconut oil' is illegal and not in terms of provision of the Act of 1972. As finally agreed by the learned counsel for the parties that the above case would cover the case of the petitioner on merits, no further consideration is required to be made in the present case on merits. However, this Court would determine with regard to the claim of refund in the instant case.

25. In the case of Mafatlal Industries Limited Vs. Union of India, reported in (1997) 5 SCC 536, the Hon'ble Supreme Court has observed that the claim for

refund can only succeed if it is alleged and proved that the person from whom the tax was illegally collected have not passed on to the burden of the duty to the another person or other person. In the present case, there is specific averments on oath that the goods, which have been brought for sell in the form of 'coconut oil' and 'refined coconut oil' and the burden of Cess was not passed on to the end-user or the customers. Thus, in my considered view, the Page No.# 11/11

petitioner would be entitled to refund of the cess wrongfully and illegally collected.

26. Regard being had to the submission of learned counsel for the respondents that in view of the rule 25 (e) of the Assam Agricultural Produce Markets (General) Rules, 1975, if the petitioner is entitled to any refund, a written application has to be filed before the authority for such refund, I am of the view that same is misplaced as the rule 25(e) clearly provides for refund of any money paid by mistake. The present case is not a payment of money by mistake rather levy and collection of Cess wrongfully and illegally.

27. In view of what has been discussed herein above, in my considered view and of course, finally agreed to by the parties, as per provisions of the Act of 1972, it is the 'coconut oil seed' on which cess is leviable and not 'coconut oil' and 'refined coconut oil'. Thus, levy and collection of cess on imported coconut oil and refined coconut oil is not sustainable and accordingly it is held illegal.

28. Consequently, the respondents shall refund the cess levied and collected to the petitioner after proper verification of the amount claim by the petitioners.

29. Writ petition stands allowed and disposed of, accordingly. Cost(s) made easy.

JUDGE

Comparing Assistant